The intense rush for channel restocking among car manufacturers is likely to sustain the momentum of passenger vehicle dispatches in February, potentially propelling the domestic wholesale volume towards the 4-lakh unit mark again in the second month of 2025.
According to industry sources, dispatches by carmakers are estimated to be between 3.95-4 lakh units in February, representing a growth of 6.5-7.8% on a year-on-year basis. This surge is likely to be driven primarily by Mahindra & Mahindra, as well as Maruti Suzuki.
In January 2025, the domestic wholesale volume hit 399,395 units, falling just 615 units short of the significant 4 lakh milestone. This was the highest monthly passenger car industry volume ever recorded.
A senior sales executive at a leading automaker explained that the surge in wholesale volume is largely a result of the original equipment manufacturers (OEMs) pushing more cars to dealerships, as channel inventories had dropped to alarmingly low levels.
By the end of December, dealership inventories had plummeted to 20-24 days’ supply, following strong festival season sales and lower production in December due to the year ending. Maruti Suzuki had said it reduced the network stock to just 9 days as of December end.
The current process of refilling the inventories is expected to restore stock levels to a more normalized range of 40-45 days.
Maruti Suzuki’s domestic passenger vehicle wholesales are projected in the range of 1.65-1.72 lakh units in February. This would represent a growth of around 6% year-on-year, taking the cumulative volume for the first eleven months of the financial year to approximately 16.2 lakh units.
However, the sales executive emphasized that, although retail sales volumes have not been as impressive as wholesale volumes, there is a sense of cautious optimism as March has historically been a strong month for retail sales.
Furthermore, April, with the festival of Navratri, is also expected to contribute to a revival of festive fervor in the market.
The industry-wide inventory levels are anticipated to reach between 450,000 and 500,000 units by the end of February 2025, which is considered a reasonable figure at the beginning of the year, according to the sales executive.
Interestingly, the February retail trends on the government’s vehicle registration portal suggest that there could be a shift in the passenger carmaker rankings during the month, in the second spot.
After a gap of nearly 13 months, an Indian carmaker might occupy the second position, a feat that has typically been dominated by global automakers in terms of wholesale volume.
Historically, the first and second positions in the Indian passenger car market have been held by foreign companies, based on their wholesale volumes.
The sales volume gap between the second, third, and fourth-largest car manufacturers by volume is expected to narrow considerably in February 2025, potentially shrinking to less than a thousand units between each contender.
As of January 2025, Maruti Suzuki commands a dominant 43% market share in the domestic passenger vehicle market. It is followed by Hyundai Motor India, which holds 14% of the market share, Mahindra & Mahindra with 13%, and Tata Motors with 12%, based on wholesale volumes.
These market share figures reflect the intense competition in the Indian automotive sector, as both domestic and global carmakers continue to vie for consumer attention in an increasingly competitive environment.
The Indian car market’s impressive performance in early 2025 highlights the industry’s resilience and the growing demand for passenger vehicles, particularly as carmakers focus on bolstering their channel inventories and expanding their domestic and export volumes.
In addition to its domestic sales, Maruti Suzuki is also seeing a robust contribution from exports, with monthly export volumes in the range of 21,000-27,000 units. The company’s export share has increased significantly, now comprising 15% of its total volume in the first ten months of fiscal year 2025, compared to 11.32% during the same period the previous year.
As the fiscal year progresses, the competition among manufacturers will only intensify, with a strong focus on maximizing production and sales during key months such as March and April, when the retail market is expected to show robust growth due to favorable seasonal and festive factors.
The coming months are likely to see further shifts in the rankings, as carmakers recalibrate their strategies to meet evolving market demands and adjust to fluctuations in inventory levels, production schedules, and consumer preferences.
FY25 Growth
Despite these two consecutive months of record-breaking wholesale volumes, the total volume of the passenger car industry grew by just 2% in the first ten months of the fiscal year 2025, reaching 3.92 million units, compared to 3.83 million units in the same period of the previous financial year.
This relatively modest increase in overall volume underscores the competitive nature of the Indian passenger car market and the ongoing efforts of manufacturers to maintain market share and push for greater sales in the coming months.
The passenger vehicle industry’s volume growth rate has been on a downward trend after the financial year 2023. The volume growth reduced to 8.4% with 42.19 lakh units sold in 2023-24 after a 27% growth in 2022-23.
At last year’s Looking Ahead Conclave, the automakers had projected growth during the current financial year in the range of 2.5-4%, with sales of around 4.3 million units.
For the next financial year, the industry is forecasting another year of low single-digit volume growth with persistent weakness in small car sales due to the affordability factor and the high base effect.
At the SIAM Looking Ahead Conclave held last week, major carmakers have projected the domestic volume to grow between 1-4% on year during the financial year 2026.